Can HCM integration with global payroll boost ROI?

Can HCM integration with global payroll boost ROI?

September 19, 2019

No alt text
Table of contents

For many multinational companies, the case for making an investment in a HumanCapital Management (HCM) system likely centered on the business value of thesolution.

But if your HCM implementation doesn’t include payroll from everywhere in theworld you do business—and many HCM solutions don’t—it’s likely that yourorganization isn’t realizing the best return on its investment. Uniting yourHCM system with a global payroll solution that supports operations fromvirtually all around the world opens up a world of strategic businessadvantages.

HCM and payroll integration

Let's look at five ways HCM and global payroll integration can help you seemore value from your investment.

1. Reduce payroll processing costs

Because of the complexity of multinational payroll, you may be relying on afragmented network of local or regional providers to process payroll, perhapseven manually. And when you have separate providers—each with its own systems,IT infrastructures and staff to process payroll and ensure compliance with alllocal wage, tax and employment laws—inconsistencies in data control andmanagement begin to multiply.

Considering that organizations spend 32 hours per week on manual, duplicatedata entry, addressing data inconsistencies becomes imperative. So when you centralizeglobal payroll with a single provider and then integrate it into your Human Capital Management system, you not only consolidate costs for processing, you reduce them as well, because you remove redundancies associated with a distributed network. Furthermore, with payroll moving from manual systems to a centralized provider within your cloud-based HCM, you eliminate the need for IT support across the network.

2. Decrease global labor costs

In addition to reducing payroll processing costs, global payroll and HCM integration can also help the organization identify ways to lower global labor costs. A centralized global provider can standardize your payroll data, and when it’s merged with your HCM, you get a single, real-time data view.

This means that no matter the currency in which salaries are paid, the language that benefits are distributed, or the country where taxes are withheld, you can see your total labor costs around the world. And you can use the information to perform workforce spend analyses, potentially answeringquestions like : Could we shift some roles to lower-cost labor markets? Or, should we redirect hiring efforts from one department to another?

Companies that implement centralized global payroll see an average of 50% inlabor cost savings through headcount reductions, which is driven by consolidation, processoptimization and automation that allow payroll and HR resources to refocus onmore value-added tasks.

3. Strengthen data compliance

If you have employees in the European Union, you know that GDPR includesprovisions on employee data. Although payroll data security has always been critical, GDPR has introduced a new, tighter level of compliance to adhere to, so that companies withemployees in the EU found to be improperly storing and processing employeedata can face fines of up to 20 million euros or 4% of annual revenue,whichever is higher.

Moving from a distributed payroll network to a centralized payroll solutionthat’s integrated with your HCM gives you a single source of employee data tomanage—which is crucial, because 47% of HR and payroll professionals saymaintaining multiple, duplicate employee records leads to increased compliancerisk.

A single source of data helps reduce potential GDPR violations related to datacollection, categorization and retention. Additionally, now that all employeedata lives in your cloud-based Human Capital Management system, the possibility of fraud or tampering that’s present in manual systems is eliminated.

4. Improve employee engagement

You’ve probably seen an increase in employee engagement since you’veimplemented your HCM. Moving your global payroll into your Human CapitalManagement system would help boost it further, because it gives your employeesaround the world one-stop, on-demand access to all the information thatmatters most to them, such as:

  • PTO accruals
  • Sick time
  • Payslips
  • Benefits
  • Tax deductions

By making it easier for employees around the world to have access to theirimportant information whenever they need it, you help foster a greaterexperience and satisfaction with your company.

5. Elevate HR within the organization

This is perhaps the most important way global payroll and HCM integration canadd value to the organization—and to HR specifically. With employee payrolland HR data consolidated into a single system, HR spends less time onrepetitive data entry tasks and moves from being reactive order takers toproactive, instrumental contributors.

With a consolidated data view, HR can better evaluate gaps and redundancies,and make strategic workforce decisions on things like talent requirements andforecasting, onboarding tactics, and proactive employee recruiting andtraining.

And as HR spends less time on redundant administrative tasks and more onevaluating the processes that have an impact on the overall business directionand goals, you’ll see an improvement in HR staff morale. With better morale,attrition will decline and you’ll have an opportunity to foster a pipeline ofcareer advancement: HR professionals who leverage advanced analytics areover six times more likely to have opportunities to climb the corporateladder.

Want to learn more about how your multinational organization can boost thevalue of your HCM? Contact us today to schedule a free consultation with a global payroll expert who can help you further explore the benefits of global payroll integration.

Explore by Topic

Loading...

Let us help youget started

pointercircle

Take the quiz!

Tell us about your business challenges and we'll provide you with our recommended solutions.
Let's get started
cards

Resources to guide you

We have several articles and guides to help you on your global payroll journey.
Read now
We're here to help you get started
Our global community of Guardians is ready to assist your team with your payroll transformation.
woman-with-glasses